Unraveling Challenges: Quality of Life, Investment, and Competitiveness in the Indonesia-Malaysia-Thailand Growth Triangle

Abstract

Introduction: Human resource development plays a crucial role in economic growth, particularly through investments in health and education, workforce participation, and overall quality of life. This study investigates the relationship between these factors and human resource performance in Thailand, Malaysia, and Indonesia, emphasizing how dynamic threshold effects influence economic outcomes.

Objectives: The study aims to analyze the impact of health and education investments, workforce participation, and quality of life on economic growth. Specifically, it explores how these factors interact and whether they exhibit threshold effects that shape human resource development.

Methods: Using secondary data from the World Bank spanning 1990–2022, the research employs Dynamic Threshold Autoregressive (DTAR) analysis. DTAR models integrate threshold elements with autoregressive models, allowing state transitions that provide a more flexible framework for examining the interplay between variables.

Results: The estimation results indicate that when a specific threshold (estimated at 3.221) is exceeded, quality of life—along with labor force participation, education investment, and health investment—significantly influences economic growth. Beyond this threshold, economic growth exhibits a self-reinforcing effect, where education investments enhance human resource caliber and health investments contribute to a healthier and more productive workforce.

Conclusions: Quality of life, encompassing education, health, and environmental factors, is pivotal in fostering human resource development. When quality of life surpasses a critical threshold, its positive effects amplify economic growth and workforce performance. Consequently, policies promoting education and health investments, alongside improvements in quality of life, can yield substantial benefits for human resource development and economic progress in Thailand, Malaysia, and Indonesia.